Koc Holding AS, the joint venture partner of Ford Motor Co. (F) in Kocaeli, Turkey, announced that it will invest 6.5 billion liras ($3.4 billion) in 2012.
The investment will be focused both on Ford’s joint venture, Otomotiv Sanayi AS (Ford Otosan), and Tupras Turkiye Petrol Rafinerileri AS, the country’s sole crude oil supply and refining company.
Ford Otosan started production in 1965, with each company holding a 41% share in the venture. It operates four facilities in Turkey, two in Kocaeli, one in Eskisehir and one in Istanbul.
The joint venture has a share of about 15% in the domestic market. Its share in the passenger car market is roughly 10%, while the share is nearly 20% in the light commercial vehicle segment.
A few months back, Ford Otosan revised its sales forecast upward to 351,000 units from 345,000 units for 2011. The forecasted sales reflect a 16% increase from the sales in 2010.
The guidance included domestic sales of 135,000 units, up from the previous forecast of 131,000 units and 126,000 units in 2010, and exports of 216,000 units, up from the prior guidance of 214,000 units and 177,000 units in 2010.
Ford Otosan plans to produce 292,000 units in 2011, up 21% from 242,000 units in 2010. The joint venture will invest $300 million this year compared with $56 million a year ago.
Turkey is one of the most important markets for the automobile in Europe. It occupies the sixth position in the continent in terms of automobile production. The country’s light vehicles market expects to grow 11% to 882,000 units this year from 792,000 in 2010.
As a result, it attracted the attention of many global automakers, including Toyota Motor Corp. (TM), Honda Motor Co. (HMC), Opel, Hyundai, Mercedes-Benz and MAN AG. The companies mostly produce vans, buses and trucks in the country.
Ford, a Zacks #3 Rank (Hold) stock, posted a 3.5% drop in profits to $1.85 billion in the third quarter of the year from $1.91 billion in the same quarter of prior year. However, on per share basis, earnings were 46 cents versus 48 cents a year ago, beating the Zacks Consensus Estimate of 44 cents. The decline in profits was attributable to a drop in commodity prices and anticipated reductions in Financial Services results.
Total revenues in the quarter went up $4.1 billion or 14.1% to $33.1 billion. This compared with the Zacks Consensus Estimate of $29.8 billion.
To read this article on Zacks.com click here.
Zacks Investment Research
